Towards a green economy


Current fisheries (US$ billion)


Value of landings Cost of fishing


Non-fuel subsidies Rent** Wages Profit


Total added-value


85 90 21


-26 35 8


17


Green fisheries (US$ billion)


101 46


10* 45 18 4


67


* The estimated US$ 10 billion in green subsidies would be to fund management programmes. ** The rent is the return to owners of fisheries resources, which is the surplus from gross revenue after total cost of fishing is deducted and subsidies taken into account. Here, rent is total revenue (US$ 85 billion) less total cost (US$ 90 billion) less non-fuel subsidies (US$ 21 billion). Note that fuel subsidies are usually in the form of rebates at the pump and therefore are already excluded.


Table 5: Green fisheries: key figures


■ As overfished stocks are rebuilt, there would be no substitution between capital and labour. That is, the various costs of fishing would stay in proportion to the current situation;


■ The practice of providing harmful subsidies to the fisheries sector is fundamentally at odds with green fisheries. Therefore, we assume that the estimated US$ 16 billion per year in harmful subsidies are eliminated or re-directed toward aiding the transition to green fisheries. Similarly, we assume that the US$ 3 billion per year in ambiguous subsidies, such as those for buybacks, would also be re-directed or eliminated;


■ The cost of fisheries management would increase by 25 per cent, from about US$ 8 billion a year to US$ 10 billion a year, to support better management under green fishing regimes;


■ Fisheries rent, that is, the return to owners of fisheries resources, would be US$ 45 billion per year in a green economy scenario. This is based on evidence from a recent report showing that potential total rent in world fisheries is about US$ 50 billion per year at Maximum Economic Yield (MEY), where the catch is about 10 per cent lower than our proposed scenario (World Bank and FAO 2009).


Given the above assumptions, global marine fisheries are projected to catch 90 million tonnes a year in a green economy scenario with lower and upper bounds of 84–100 million tonnes. The estimated value corresponding to this level of catch is about US$ 101 billion per year (with a range of US$ 91 billion-US$ 121 billion. The total cost of fishing in a green economy scenario is estimated to be US$ 46 billion, compared to US$ 90 billion currently. Assuming that payments


94


to capital (normal profit) and labour (wages) remain proportionally constant in relation to total costs, the normal profit and wage income would amount to US$ 4 billion and US$ 17.8 billion, respectively. Resource rent for a green fisheries sector is assumed to be US$ 45 billion per year based on recent research (World Bank and FAO 2009).


Total value added, or fisheries contribution to human welfare, in a green economy scenario is estimated at US$ 67 billion a year (the sum of resource rent + payments to labour + normal profits). This represents a green economy improvement of US$ 50 billion per year compared with the sector’s existing contribution to human welfare (Table 5).


Indirect benefits from rebuilding As the value of the global marine catch increases from about US$ 85 billion to US$ 101 billion a year in a green-economy scenario, the total of direct, indirect and induced economic effects, arising from marine fish swells from US$ 235 billion to US$ 280 billion per year, assuming a linear relationship between catch and multiplier effects.


Benefits from recreation and tourism In general, recreational fishers do not necessarily fish for the catch but rather for experience. It should be reasonable to assume that a healthier ocean rich in biodiversity is likely to increase the utility and therefore the benefits derived by recreational fishers. However, owing to the lack of information, we refrain from doing so in this report.


3.3 The cost of greening global fisheries


A key element of greening the fisheries sector involves moving from the current situation where we are not fishing the resource in a sustainable manner to one where the fish we catch each year is equal to or less than the growth of wild stocks. To make the change from the current state of affairs would require some investment into adjusting fishing capacity, managing transitions in labour markets, management programmes and scientific research. Two modelling exercises were undertaken to estimate the cost of greening fisheries. A one time investment of US$ 100-300 billion was calculated in this chapter to reduce excessive capacity, retrain fishers and improve fisheries management. Under the Green Economy Report T-21 modelling, a scenario of a larger and deeper spending of 0.1 to 0.16 per cent of GDP over the period 2010-2050 was considered to reduce the vessel fleet, relocate employment and better manage stocks to increase catch in the medium and longer term.5


5. See the Modelling chapter in this report.


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